PUC gives solar users a break / People who make own power don't have to pay

Published 4:00 am, Friday, April 4, 2003

California's small solar power generators won't have to help repay the state for the billions it spent trying to keep the lights on during the 2001 electricity crisis, state regulators ruled Thursday.

By a 3-to-2 vote, the state Public Utilities Commission agreed to exempt many consumers getting power from solar, wind and fuel cells from so-called solar exit fees. While the fees proposed by the Legislature would have helped pay back the $6 billion the state spent buying electricity, environmentalists and clean power advocates warned it could have damaged the fast-growing solar industry.

The proposed fee of 2 to 5 cents per kilowatt-hour would have cost most people with solar systems a couple of hundred dollars a year, she added, and made the potential cost savings of generating their own power much less appealing.

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It also demonstrated the state's political ambivalence when it comes to renewable power sources. On one hand, the state already subsidizes about half the cost for people who want to install solar systems to their homes. On the other, the proposed fees would have made the systems more expensive to use.

"These are technologies the state has been promoting," said Smith, who also is director of regulatory affairs for PowerLight, a leading Bay Area solar company. "The governor already has called for having 17 percent of the state's power produced by renewable sources by 2017."

California's current budget crunch, however, has left state officials looking for money anywhere they can find it.

The original plan called for imposing the new fee on anyone who installed a renewable energy system after September 2001. The idea was that customers using the statewide power grid before then were getting the benefit of the billions the state spent to subsidize soaring electricity costs.

Since people getting their power from the big public utilities have seen their rates go up to repay the state for its energy costs, those leaving the system still should pay a share for the help they got, said Paul Moreno, a spokesman for Pacific Gas and Electric.

While PG&E lost its argument to the PUC, the utility won't be hurt too badly. Less than 1 percent of the state's energy usage comes from customers who generate their own power. The proposed surcharge on solar customers would have raised only about $1.5 million a year, according to solar industry sources.

"We never lobbied the Legislature or the PUC on this issue," Moreno said. "The state was imposing this fee, and the convenient way for them to collect it was on power bills."

Solar and wind power users didn't get off completely free. While those using systems smaller than 1 megawatt are exempt from the fees, the PUC ruled that people using bigger low-emission systems still have to pay a surcharge for the bonds California sold for its energy costs.